UK Cloud Storage Market

UK Cloud Storage Market Overview:

The UK cloud storage market size reached USD 5.1 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 25.7 Billion by 2033, exhibiting a growth rate (CAGR) of 15.96% during 2025-2033. The market is being driven by rising smartphone adoption, expansion of data centers, demand for cost-effective solutions, improvements in cloud security technologies, and stricter regulatory compliance. The UK cloud market is highly concentrated, with Amazon Web Services (AWS) and Microsoft Azure together holding 60–80% of the IaaS and PaaS markets as of 2022, shaping competitive dynamics and influencing customer adoption patterns. 

UK Cloud Storage Market Trends:

Rising Adoption of Smartphones

In 2023, 98% of all adults aged 16-24 in the UK own a smartphone, as per Uswitch. The increasing adoption of smartphones among individuals is bolstering the market growth. Smartphones, tablets, and wearables are constantly generating data, including user-generated content, application data, geolocation data, and even health metrics. The Internet of Things (IoT) devices, such as smart home systems, industrial sensors, connected vehicles, and healthcare devices, generate real time data that needs to be collected, processed, and stored. These devices often produce high-frequency and high-volume data streams. Cloud storage services offers a centralized and scalable infrastructure to manage the vast and ever-growing amount of data these devices generate. In addition, cloud storage is highly scalable, allowing businesses and individuals to easily expand their storage capacity as the amount of data grows. This is especially important for IoT devices, which often generate continuous streams of data. Cloud backup solutions avoid the need for upfront investments in physical storage hardware. Furthermore, data stored in the cloud can be accessed from any device with an internet connection, ensuring users can retrieve their data whenever needed. Cloud data storage ensures that data from mobile and IoT devices is updated in real time, enabling businesses to make timely decisions based on up-to-date information.

Expansion of Data Centers

On 11 September 2024, Amazon Web Services invested US$ 10.5 billion in its UK data centers with big artificial intelligence (AI) plans in store for the region. This helps in meeting the growing needs of users and partners and supporting the transformation of the UK’s digital economy. The rise of data centers and the enterprise cloud UK aids in enhancing the overall cloud infrastructure, making cloud storage more accessible and efficient for businesses and individuals. By expanding local data centers, cloud providers can offer faster and more reliable services, reducing latency and improving performance for users. Moreover, with regulations like the General Data Protection Regulation (GDPR) and other data protection laws, businesses in the UK are increasingly concerned about where their data is stored. Local data centers allow companies to meet data residency requirements, ensuring that sensitive data remains within the UK. Apart from this, the presence of multiple data centers within the UK enables cloud storage providers to offer improved redundancy and disaster recovery services.

Growing Demand for Scalable and Economical IT Solutions

The UK cloud storage market is witnessing steady growth due to increasing demand from businesses seeking scalable and cost-effective IT infrastructure. Traditional on-premise systems often involve high upfront capital expenditure, ongoing maintenance, and limited flexibility. Cloud storage, in contrast, allows organizations to expand or reduce capacity based on operational needs without significant investment in hardware. This pay-as-you-go model appeals particularly to small and medium enterprises (SMEs), which form a large part of the UK’s business ecosystem. The ability to scale services dynamically supports seasonal demand, workload fluctuations, and project-based storage requirements. Furthermore, economic pressures and the need to optimize operational budgets are encouraging businesses to move towards subscription-based storage models. Large enterprises are also adopting hybrid and multi-cloud strategies to ensure redundancy and cost optimization across multiple service providers. As these companies increasingly digitize operations, the cloud becomes an essential component of their IT strategy. Tools like GoogleDrive, offering flexible storage and seamless integration with enterprise workflows, are playing a role in supporting this shift, fostering long-term market growth for cloud storage providers in the UK.

Remote Work and Hybrid Working Models

The shift toward remote and hybrid work arrangements in the UK has significantly accelerated the adoption of cloud storage solutions. As organizations adapt to decentralized workforces, there is a pressing need for accessible, secure, and collaborative digital storage environments. Cloud platforms enable employees to access files from any location, using any device, which enhances productivity and supports business continuity. With offices operating in hybrid modes, the importance of seamless data synchronization, real-time collaboration, and centralized document management has become critical. Companies across various sectors—from finance to education—are investing in cloud storage to ensure that remote teams remain connected without compromising on data integrity or speed. Furthermore, cloud-based solutions offer automated backups and built-in security protocols, reducing the risk of data loss during transitions between office and home networks. The growing normalization of flexible working arrangements is expected to keep fueling demand, prompting public cloud storage providers to innovate around user access management, data sharing controls, and remote system integration.

Regulatory Compliance and Data Security

Compliance with data protection regulations and the need for robust cybersecurity measures are key factors shaping the UK cloud storage market. Regulations such as the UK General Data Protection Regulation (UK GDPR) require organizations to store and manage personal data securely, with clear accountability for data processing and retention. Non-compliance can lead to significant financial penalties, which makes secure cloud storage not just a convenience but a regulatory necessity. Moreover, icloud storage providers in the UK are investing heavily in encryption, access control, and continuous monitoring to offer storage environments that align with compliance frameworks. Moreover, industry-specific standards—like PCI DSS for financial services or NHS Digital’s data security standards for healthcare—drive the need for specialized storage solutions that can guarantee confidentiality, integrity, and availability of data. With cyber threats growing in complexity and frequency, businesses are prioritizing cloud services that offer end-to-end security features, incident response mechanisms, and regular audit capabilities. Solutions such as OneDrive, known for its enterprise-grade security and integration with compliance tools, are increasingly preferred, reinforcing trust and ensuring long-term market adoption.

Government Initiatives

Government support has played a notable role in advancing cloud storage adoption in the UK. Initiatives such as the “Cloud First” policy encourage public sector organizations to consider cloud-based services before traditional IT solutions. This directive aims to modernize digital infrastructure, reduce IT costs, and improve service delivery across government departments. Additionally, funding programs targeting digital transformation in education, healthcare, and local government sectors have created demand for secure and scalable storage solutions. The UK government has also outlined clear procurement frameworks—such as G-Cloud—which simplify the acquisition of approved cloud services by public institutions. These frameworks provide transparency, standardization, and cost-efficiency, making cloud storage adoption more accessible to government agencies and their partners. Furthermore, the emphasis on sovereign data storage and the use of data centers located within the UK aligns with national security priorities. By fostering a regulatory environment conducive to cloud technology, government action continues to stimulate investment, competition, and innovation within the UK cloud storage market trends 2025.

UK Cloud Storage Sector News:

• March 2025: Oracle announced a USD 5 Billion investment to expand UK cloud infrastructure over five years. The initiative aimed to support AI-driven growth, enhance cloud storage capacity, and improve multicloud integration, enabling UK sectors to modernise applications and meet evolving data management and sovereignty needs.
• December 2024: Wasabi Technologies expanded its UK cloud storage presence by integrating with IBM Cloud’s London Multizone Region. This development enhanced data residency compliance and supported AI-driven media solutions like Wasabi AiR. It strengthened secure, scalable storage for UK enterprises, particularly in sports and entertainment.
• July 2024: Amazon Web Services (AWS) agreed to provide US$ 10.3 million in cloud computing storage credits to biomedical database UK Biobank. This will be matched by the UK government, bringing the total cloud storage spending to US$ 20.6 million. UK Biobank stores data that helps researchers develop new ways to prevent, diagnose, and treat diseases like dementia, Parkinson's, diabetes, and cancer.
• June 2024: Seagate announced the expansion of its Lyve Cloud S3 compatible object storage service with the addition of a second data center in London. Simultaneously, Seagate extended its UK Lyve Cloud channel through a fresh distribution agreement with Climb Channel Solutions and a long-term collaboration with Exertis. These partnerships aim to offer a comprehensive range of advanced cloud and on-premises storage solutions to UK resellers and solution providers.

UK Cloud Storage Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country level for 2025-2033. Our report has categorized the market based on component, deployment type, user type, and industry vertical.

Component Insights:

• Solution
• Services

The report has provided a detailed breakup and analysis of the market based on the component. This includes solution and services.

Deployment Type Insights:

• Private
• Public
• Hybrid

A detailed breakup and analysis of the market based on the deployment type have also been provided in the report. This includes private, public, and hybrid.

User Type Insights:

• Large Enterprises
• Small and Medium-sized Enterprises

The report has provided a detailed breakup and analysis of the market based on the user type. This includes large enterprises and small and medium-sized enterprises.

Industry Vertical Insights:

• BFSI
• Government and Public Sector
• Healthcare
• IT and Telecom
• Retail
• Manufacturing
• Media and Entertainment
• Others

A detailed breakup and analysis of the market based on the industry vertical have also been provided in the report. This includes BFSI, government and public sector, healthcare, IT and telecom, retail, manufacturing, media and entertainment, and others.

Regional Insights:

• London
• South East
• North West
• East of England
• South West
• Scotland
• West Midlands
• Yorkshire and The Humber
• East Midlands
• Others

The report has also provided a comprehensive analysis of all the major regional markets, which include London, South East, North West, East of England, South West, Scotland, West Midlands, Yorkshire and The Humber, East Midlands, and Others.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

UK Cloud Storage Market Report Coverage:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the UK cloud storage market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the UK cloud storage market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the UK cloud storage industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.